DFL legislators called Monday for $450 million-per-year in new revenue from corporations -- by closing tax loopholes and making other changes -- so that the state can reimburse school districts for money borrowed in previous budget-balancing bills.
Rep. Ryan Winkler, DFL-Golden Valley, and Sen. Katie Sieben, DFL-Newport, said the corporate changes would allow the state to pay back $2.2 billion in IOUs to school district within five or six years. The funds were used to help balance the state budget by delaying state payments to schools. Democrats say the shift has put pressure on local school budgets and caused them to incur borrowing costs.
Appearing with parents and students, Winkler and Sieben, whose party is in the minority in the Legislature, accused Republicans of relying on school shifts rather than agreeing to raise income taxes on the wealthy, as DFL Gov. Mark Dayton proposed. The DFL legislators said in a statement closing corporate loopholes would be a fair tradeoff for repaying districts.
The legislators said the borrowing is part of a larger problem of a slipping state education system, in which Minnesota now ranks among the worst states in class sizes for elementary grades.
Their bill -- which is at cross-purposes with Republican attempts to reduce corporate taxes -- would repeal Foreign Operating Corporation provisions, close loopholes and make other changes. The legislators said one of the goals is to tax revenue that is sheltered from state taxes in offshore corporations.
Their bill, House File 2480, has been referred to the House Taxes Committee. House Minority Leader Paul Thissen, DFL-Minneapolis, is among the co-sponsors.